Clause 3
Finance (No. 2) Bill
5:15 pm
John Healey (Financial Secretary, HM Treasury; Wentworth, Labour)
We now quit cigarettes and move on to beer.
Clause 3 increases, in line with general inflation, the excise duty charged on beer. That is part of a broader package of decisions on alcohol duty that continue progress towards the Government’s long-term aim of achieving a fairer balance of taxation across all alcohol products without imposing real-terms increases on those, such as beer, that currently are more lightly taxed.
Excise duties on alcohol provide a crucial£7.9 billion a year to invest in tackling crime and essential public services, such as schools, hospitals and transport. Beer accounts for more than 40 per cent. of alcohol duty receipts. The inflation-only duty increase, which, together with VAT, is equivalent to about a penny a pint, is necessary to maintain that important source of revenue. By way of background, I remind the Committee that that modest increase, a freeze inreal terms, follows freezes—actual, not real-terms freezes—in beer duty in three of the past eight Budgets.
However, I am aware also of the pressures on brewers and the pub industry, which play an important part in our economy, our heritage and, for those of us who like a beer, our leisure. This modest, inflation-only increase in beer duty recognises their concerns but maintains an important stream of revenue necessary to support our long-term commitment to continue to increase investment in some of our vital public services. I commend the clause to the Committee.